Tuesday, March 6, 2018

Just over a decade ago, I barely noticed in passing a rally in Piazza Maggiore, Bologna, part of the quirkily titled 'vaffanculo' day (roughly translated, '**** you day') organized by comedian Beppe Grillo. The aim was to gather signatures for a referendum banning anyone with a criminal record from standing for election to the Italian parliament. The initiative achieved a spectacular 336,000 signatures, far more than the 50,000 necessary to hold a vote. The campaign was the parting shot of what became the Five Stars Movement, the undisputed winner of Sunday's election.

The slogan was not just a joke. The M5S is a difficult movement to define, combining utopian visions of extensive popular participation in politics through the internet, environmentalism, libertarian values, hostility to the euro and occasional anti-immigrant demagoguery. But what is very clear about the M5S is its unequivocal and aggressive rejection of Italy's ruling class, and indeed the current political order more generally. If the M5S has won almost a third of the vote in only its second general election, winning almost twice as many votes as any other party, this tells us that a lot of Italians have had enough. On top of this, the xenophobic League and the fascist Brothers of Italy won 18 per cent and 4 per cent of the vote respectively. For a comfortable majority of Italians, '**** you' is the best description of their feelings about how the country is governed.

It is easy to fit this result into the broad pattern of a populist wave afflicting western politics, and undoubtedly resentment towards immigration and authoritarian rhetoric were a big part of the League's campaign in particular. And indeed the likely outcome of this vote, whatever the eventual government that emerges out of the messy negotiations that will follow, will be a toughening of the Italian state's approach to the refugee crisis and the rights of migrants in general. The scapegoating did not take long to begin, as a Senegalese man was shot dead in Florence, apparently randomly, only hours after the polls had closed. The people have spoken, and politicians have heard that message.

But immigration is not the problem. Indeed, it is the solution for a country in deep demographic crisis. The problem is that the Italian economy has barely grown since I rolled up in Florence to start graduate school. Since the 1992 financial crisis, Italy has followed an ambitious programme of structural reforms, cutting wasteful public spending, raising taxes and combating evasion, privatizing banks and state-run industries, liberalizing labour regulations, abolishing price controls and introducing a powerful anti-trust authority, and of course, joining the euro. Yet GDP per capita has fallen since Italy entered Monetary Union.

The answer from Europe is that Italy needs more "reform". The possibility that the proposed reforms may not be working does not seem to occur to the technocrats and bankers that have cast sentence on Europe's south, blaming the stagnation on loose morals instead. In fact few governments in Europe have shown Italy's restraint. Despite an aging population, public spending has barely grown in the past two decades, whilst tax revenues have risen, meaning that since 1993, with very little growth in GDP, the Italian government has been running a budget surplus, net of borrowing costs.

The vote for the Five Stars Movement reflects many different gripes and ideas about how to solve Italy's problems, but what it has in common is a desire for political change. It is hard not to read as a rejection of the austerity and structural reform mantra emanating from Brussels, and indeed from policy elites in Rome and their liberal intellectual backers in places like Bocconi University. Following on from the political earthquakes in the US, UK, Greece and Spain, Italy is another data point confirming the death of the liberal political order that brought us austerity, inequality and zero growth for the 99 per cent. Unfortunately, like Trump and Brexit, the Five Stars Movement is also the perfect illustration of the intellectual confusion we face in attempting to move beyond it.